Bengaluru-based luxury car rental startup HYPE Technologies is in early talks to raise $25-30 million in a Series A round of funding, from venture capitalists and car makers including BMW Group India and Mercedes India, according to a top company executive.
HYPE is also in talks with private equity investors and finance management companies, the company’s chief executive Raghav Belavadi said in a phone interview.
Belavadi said that HYPE will use the inbound funds to finance purchase of vehicle assets. The startup’s rental fleet offers high-end luxury vehicles such as BMW, Audi, Mercedes, and Maserati. Users book cars for rent directly from HYPE’s website or through its mobile app.
HYPE, which was launched in 2017, runs on an aggregator model, working with dealers, and manufacturers.
Post the funding, HYPE plans to pivot into an ownership model, according to Belavadi.
The startup provides services in seven cities, including New Delhi, Mumbai, Bengaluru, Hyderabad, Chandigarh, Chennai, and Goa. Rentals for cars on its platform start from ₹11,000 per day for a Mercedes, up to ₹90,000 per day for supercars such as Porsche.
HYPE, which operates 2,600 cars, generated gross revenue of $400,000 in FY18, according to Belavadi. It aims to achieve $1 million in gross revenue for FY20, he said.
“We plan to take ownership of 100 cars in our own fleet. We want to get into a deeper partnership with carmakers and will look for a strategic asset financing or a fleet partnership deal,” said Belavadi.
A majority of HYPE’s customers are corporate users and high net worth individuals (HNIs). It offers a self-drive option and a chauffeur-driven service as well. HYPE is also exploring an option for people to sublet their luxury vehicles directly to the platform for rentals, he said.
If the funding goes through, HYPE will join one of many vehicle rental startups who are seeking more strategic partnerships with car makers for adding new vehicle assets.
This month, Ratan Tata raised his stake in Ola and announced plans to invest in Ola’s upcoming electric vehicle operations. Tata is also an early investor in ANI Technologies, which runs Ola.
In March, Mint reported that Mahindra is in talks to lead a $500 million funding into Bengaluru-based Zoomcar.
Bike rental startups including VOGO and Bounce also have a partnership with Honda and TVS respectively for supplying vehicles to this fleet.
Vehicle rental platforms use its vehicles for a 4-5 year period and sell the asset back to the dealer or the manufacturer. Sometimes vehicles are also sold in the second-hand market directly after it completes its time period on a rental platform.
This article was first published on livemint.com.